J.C. Penney Co.said earnings more than doubled in its first quarter, helped by lower pension-expense charges and an uptick in sales, but the retailer took a guarded view of the rest of the year.
J.C. Penney said during the first quarter just about all of its merchandise categories showed improvement from a year ago, with men's and children's merchandise and shoes and handbags making the greatest gains.
“We know that our customers remain concerned about their budgets, however they respond well to merchandise that's new and trend-right at compelling prices,” Chief Executive Myron Ullman said.
For the quarter ended May 1, J.C. Penney reported a profit of $60 million, or 25 cents a share, up from $25 million, or 11 cents a share, a year earlier. The results met Wall Street's expectations and were above J.C. Penney's own April guidance of 20 cents to 24 cents a share. Excluding items such as pension-plan expenses, earnings from continuing operations rose to 40 cents from 34 cents, J.C. Penney said.
Gross margin increased to 41.4% from 40.5% and same-store sales rose 1.3%, while merchandise inventories were $3.2 billion at the end of the first quarter, down a bit from a year ago.
The company last week reported that its total sales rose 1.2% to $3.93 billion and same-store sales increased 1.3%. Sales rose in six of seven merchandise divisions, with home goods the laggard. The Southeast turned in the best sales performance geographically.
J.C. Penney projected a second-quarter profit of 10 cents to 13 cents a share, with total sales growth of 2% to 2.5% and same-store sales growth of 2.5% to 3%. Analysts polled by Thomson Reuters projected earnings of 13 cents and 2% total-sales growth to $4.03 billion. The year's profit target was raised 9 cents from February's view to $1.64, but is below Wall Street's expectation for $1.65.
